Bitcoin Fails the Smell Test: Massachusetts Securities Regulator

Bitcoin reached a record high above $19,800 in mid-December and has increased more than 1,500 percent over the last 12 months and is currently trading around USD $13,000 at the time of writing.

In brief:

William Galvin, secretary of the Commonwealth of Massachusetts has said that bitcoin doesn’t pass the smell test.

A warning against cryptocurrency has been issued by Massachusetts’ top securities regulator, claiming that the bitcoin market is “entirely speculation.”

Recently while talking to CNBC, William Galvin, secretary of the Commonwealth of Massachusetts, said that bitcoin doesn’t pass the smell test.

He said, “There is no product here. This is entirely speculation. That’s already been proven by the high gyrations of the value. It’s also subject to manipulation because no one can explain it and no one can control it.”

Bitcoin reached a record high above $19,800 in mid-December and has increased more than 1,500 percent over the last 12 months and is currently trading around USD $13,000 at the time of writing. Prior to this comment, Galvin also issued a statement warning against “bitcoin mania,” and listed seven points for investors to consider before buying bitcoin. These points included checking fees on exchanges, the failure to recover stolen funds and the rapid fluctuations in price.

The federal regulators have increased their warnings to investors about risks associated with cryptocurrencies and Galvin’s comments are the latest from U.S. regulators. Earlier this month, Securities Exchange Commission and the Financial Industry Regulatory Authority have also issued such warnings.

With bitcoin’s meteoric rise, the federal government has also been cautioning investors. Galvin also raised his concerns regarding issues around other activities such as initial coin offerings. “We believe they (ICO) certainly qualify as securities,” Gavin said, adding “This is clearly an area with potentials for fraud. And we are very concerned about that.”

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